Tobacco auctions open in Georgia

A mid drought, deadly disease and a new way of selling one of Georgia's top money-making crops, tobacco auctions opened across the state during the last week of July and the first week of August.

Georgia's tobacco auctions started in Statesboro on July 30. Opening prices for this region were $1.56 to $1.78 per pound.

“Prices look good,” says J. Michael Moore, University of Georgia Extension agronomist. Another auction opened in Douglas on July 31 and smaller auctions were held in Moultrie and Nashville.

But much of Georgia's tobacco will not go to auction this year. About 92 percent of the 2002 crop was contracted before April 15. Contract farmers bypass the auction process and sell directly to tobacco companies, says Moore.

Because of this, the number of auction sites across Georgia has dwindled over the past few years. “New auction warehouses will not be opening up,” notes Moore.

Anyone who wants to know where and when tobacco auctions will take place, plus other Georgia tobacco information, can go to www.georgiatobacco.com.

Though auctions will continue to be a way to sell tobacco, they're becoming less popular. “For the second year in a row, growers have chosen overwhelmingly to sign contracts as a means of marketing their crop,” says Moore.

Farmers who contract see the advantage of delivering their tobacco and returning home with a check that same day, he adds. There are 10 receiving stations in Georgia and Florida where farmers can deliver directly to the tobacco company.

“There's an efficiency to the operation in dealing directly with the individual who purchases the tobacco,” he says. But growers who choose to go to auction have an opportunity to compete for the highest bid among all the companies. And this year, prices could be high for non-contracted quality Georgia tobacco.

Tobacco companies already competed heavily to gain contracts with Georgia and Florida growers. Tobacco in this region — because of its high sugar content — is highly sought after. Only 80 percent of the tobacco from other producing states was contracted, compared with 92 percent in Georgia and Florida.

A growing season scarred by deadly diseases, though, has choked the supply of Georgia tobacco. Tomato spotted wilt virus killed about 35 percent of this year's tobacco crop in Georgia. This will cause a reduction in overall production of about 20 percent. And that, says Moore, is a conservative estimate.

Farmers have battled the disease, which also affects tomatoes, peanuts and other vegetable crops, since 1986. But this year was the worst in history, he says.

Georgia farmers are allowed, under government regulations, to grow about 60 million pounds of tobacco. A 20 percent reduction of that is 12 million ponds. That calculates, conservatively, into $21.6 million in tobacco that won't be sold this year.

The Georgia Department of Agriculture is pushing for disaster assistance for tobacco farmers devastated by disease and drought this year. “Growers have been hurting financially, spending extra money to produce this crop. And then they're going to come up short on tobacco to sell,” says Moore.

Will the shortage of quality Georgia tobacco have an effect on demand this year? “The only place to find that out is where there is some competition, and that's at the auction sites,” says Moore. He says it's tough to say how much tobacco will be harvested this year. There could have been as many as 27,000 acres.

“But we've had close to 1,000 acres destroyed and insurance collected on it because of tomato spotted wilt virus,” he says.

Georgia averages about 2,000 pounds of tobacco per acre. But this year, says Moore, the average will be closer to 1,800 pounds per acre. Many frustrated farmers feel an urgency to be finished with this year's crop, he says.

“But don't get in a hurry. The best tobacco is yet to be harvested or cured.”